Core Viewpoint - FTSE Russell announced adjustments to several indices, including the FTSE China 50 Index, FTSE China A50 Index, FTSE China A150 Index, FTSE China A200 Index, and FTSE China A400 Index, effective after the market close on December 19, 2025 [1][17]. Group 1: Index Adjustments - The FTSE China A50 Index will include Luoyang Molybdenum and Sungrow Power, while removing Jiangsu Bank and SF Holding [3][19]. - The FTSE China 50 Index will add China Hongqiao, CATL, and Heng Rui Medicine, and remove CITIC Securities, Great Wall Motors, and Li Auto [5][21]. - The FTSE China A150 Index will add Ying Shi Innovation, Jiangsu Bank, Huadian New Energy, SF Holding, Jiangbolong, and Huayou Cobalt, while removing Luoyang Molybdenum, Desay SV, Longi Green Energy, Baoxin Software, Shanghai Pharmaceuticals, and Sungrow Power [9][25]. - The FTSE China A200 Index will include Ying Shi Innovation, Huadian New Energy, Jiangbolong, and Huayou Cobalt, and exclude Desay SV, Longi Green Energy, Baoxin Software, and Shanghai Pharmaceuticals [11][27]. - The FTSE China A400 Index will see a broader adjustment, adding Anji Technology, Baiyin Nonferrous Metals, Yitang Co., and BlueFocus, while removing Chipbond Technology, Yipin Hong, Guanghuan Xin, and Huaxi Biological [12][28]. Group 2: Investment Implications - The adjustments by FTSE Russell are expected to attract passive fund allocations to the included stocks and increase overseas interest in Chinese assets [15][31]. - In the first ten months of 2025, foreign capital inflow into the Chinese stock market reached $50.6 billion, significantly surpassing the $11.4 billion for the entire year of 2024, marking an increase of over three times [15][31]. - UBS forecasts that the A-share market will see an increase in earnings growth from 6% this year to 8% next year, driven by improved nominal GDP growth and a narrowing of PPI declines [16][32]. - Morgan Stanley has set a target for the CSI 300 Index at 4,840 points by December 2026, indicating a stable outlook for Chinese stocks amid moderate earnings growth and higher valuation levels [16][32].